{"id":9139,"date":"2024-01-13T23:03:53","date_gmt":"2024-01-13T17:33:53","guid":{"rendered":"https:\/\/asia.businessupturn.com\/?p=9139"},"modified":"2024-01-13T23:03:53","modified_gmt":"2024-01-13T17:33:53","slug":"moodys-upgrades-turkeys-economic-outlook-cites-decisive-policy-shift","status":"publish","type":"post","link":"https:\/\/www.businessupturn.com\/asia\/middle-east-asia\/turkey\/moodys-upgrades-turkeys-economic-outlook-cites-decisive-policy-shift\/9139\/","title":{"rendered":"Moody\u2019s upgrades Turkey\u2019s economic outlook, cites \u2018Decisive\u2019 policy shift"},"content":{"rendered":"

Moody\u2019s Investors Service has revised Turkey\u2019s economic outlook from stable to positive, attributing the change to a \u201cdecisive change\u201d in economic policy by Turkish authorities. The move comes as the nation shifts towards a more orthodox monetary policy, addressing major macroeconomic imbalances. The rating agency affirmed Turkey\u2019s government debt at B3, though six notches below investment grade, aligning it with countries like Angola and Barbados.<\/span><\/p>\n

Analysts Kathrin Muehlbronner and Dietmar Hornung expressed optimism about the potential reduction of macroeconomic imbalances as a result of the return to orthodox monetary policy. Despite an expected rise in headline inflation in the short term, Moody\u2019s sees signs that inflation dynamics are beginning to shift, suggesting the regaining of credibility and effectiveness in monetary policy.<\/span><\/p>\n

Moody\u2019s has commended Turkey for its move towards a mainstream economic policy following last year\u2019s elections, emphasizing that a sustained commitment to the new plan could lead to a rapid improvement in the country\u2019s creditworthiness. However, the agency issued a cautionary note, warning that an excessive increase in the minimum wage could undermine the anticipated slowdown in inflation.<\/span><\/p>\n

The Turkish government, led by Finance Minister Mehmet Simsek, has actively advocated for a rating upgrade, criticizing Moody\u2019s and other rating agencies for lagging behind market assessments of Turkey. Investors\u2019 perception of risk in Turkish debt, measured by credit-default swaps, has improved since Simsek assumed control of the country\u2019s economy last year, implementing market-friendly policies. The central bank, under a new governor, has significantly increased the cost of borrowing by 34 percentage points to 42.5% during the same period.<\/span><\/p>\n

Before Simsek\u2019s tenure, Turkey faced challenges with inflation spiralling out of control, driven partly by President Recep Tayyip Erdogan\u2019s emphasis on prioritizing growth at any cost. Moody\u2019s recognition of the shift towards a more conventional economic approach reflects positively on the government\u2019s efforts to stabilize the economy.<\/span><\/p>\n

In September, Fitch Ratings raised Turkey\u2019s credit outlook to stable from negative, scoring the country at B, five notches below investment grade. S&P Global Ratings followed suit in December, elevating the country\u2019s rating outlook to positive while affirming its sovereign rating at B.<\/span><\/p>\n

The collective praise from major credit rating agencies underscores the global confidence in Turkey\u2019s economic trajectory. Moody\u2019s, in particular, acknowledges the positive impact of a strategic departure from previous economic policies and the implementation of measures aimed at addressing underlying issues.<\/span><\/p>\n

The Turkish government\u2019s commitment to economic reforms and the central bank\u2019s assertive stance on monetary policy have been instrumental in attracting positive assessments from rating agencies. As Turkey navigates these economic shifts, continued adherence to prudent fiscal measures will likely play a pivotal role in further enhancing the country\u2019s creditworthiness on the international stage.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Moody\u2019s has commended Turkey for its move towards a mainstream economic policy following last year\u2019s elections, emphasizing that a sustained commitment to the new plan could lead to a rapid improvement in the country\u2019s creditworthiness.<\/p>\n","protected":false},"author":429,"featured_media":9140,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[5927,5951,5950,5564,307,1070],"class_list":["post-9139","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-turkey","tag-decisive-change","tag-dietmar-hornung","tag-kathrin-muehlbronner","tag-mehmet-simsek","tag-moody","tag-turkey"],"reading_time":"3 min read","_links":{"self":[{"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/posts\/9139","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/users\/429"}],"replies":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/comments?post=9139"}],"version-history":[{"count":0,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/posts\/9139\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/media\/9140"}],"wp:attachment":[{"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/media?parent=9139"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/categories?post=9139"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/tags?post=9139"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}